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The occupational disability insurance (BU) can ensure the financial security of the person concerned in the event of loss of the employee. Meaningful termination of the BU is therefore usually only if the customer can expect a better price-performance ratio at another provider and has a good state of health. However, anyone wishing to terminate their policy should be aware that this can lead to unpleasant consequences.

Disability insurance: Consider termination well.

Types of termination of disability insurance

Basically one differentiates between two different possibilities to terminate. With proper dismissal , disability insurance can be terminated at the end of the insurance year taking into account the minimum contract period. Depending on the provider, the contractual notice period is usually between one and three months. If the customer pays his insurance premiums not annually but in installments over the year, he may also terminate the insurance according to the cancellation period before the next premium payment.

The customer is then entitled to an extraordinary termination of the disability insurance if the insurance company changes certain conditions of insurance for the tariff during the term of the contract and the insured person is affected. This can be the case, for example, if the disability insurance costs are increased without the benefits being improved accordingly. For contracts concluded prior to June 24, 1994, there may be special conditions for termination of the BU.

Cancel occupational disability insurance – what to look out for?

If the insured wishes to terminate his disability insurance, he must strictly adhere to the notice period and other formalities and conditions . Otherwise, the termination is not final and the insurance contract will continue. The termination should be submitted in writing and by post as a registered letter with acknowledgment of receipt . A registered letter costs a little more than a standard letter, but this ensures that the letter of termination was actually accepted by the insurance company. An alternative is the cancellation by fax. The transmission of the BU termination by e-mail is usually not sufficient.

Special case: Termination of the BUZ

Those wishing to terminate their occupational disability insurance but not having it as a separate policy (SBU) but as a combined insurance (BUZ) must expect a more complicated procedure. Since the cover for occupational disability in this case was concluded as an addition to another main insurance, this can also be affected by the termination . For a BUZ in combination with a life insurance, this can mean, for example, that the life insurance must be dissolved. Special notice periods may apply for the cancellation of the BUZ, which are based on the terms and conditions of the main insurance.

Can the insurance for their part cancel the BU?

Not only the insured, but also the insurance company itself has the right to terminate a current occupational disability insurance. This applies in particular if it can prove that the policyholder is in breach of contract . A typical case is the violation of the obligation to disclose the risk assessment . If, for example, the insured person has made false statements in the occupational disability insurance health questions relating to his previous illnesses, this is a reason for the insurance company to terminate the contractual relationship. In addition, they do not have to repay the already received contributions and can even stop the payment of the BU pension.

Cancel and change BU

Switching to another occupational disability insurance may be advisable. If the contributions are only badly affordable for the insured, because they have been increased or the personal life situation has changed, a solution must be found. If the policyholder is only temporarily in financial difficulty, he should first try to obtain an occupational disability insurance contribution exemption. In this way he can suspend the payment of the premiums for a certain period of time . However, if the financial problem is permanent or the customer dissatisfied with his insurer’s services, he should keep a cool head and act strategically.

First of all, the insured must decide whether he wants to terminate the occupational disability insurance only, or even wants to change to another provider. Since the BU is an existential protection, the complete abandonment of a BU is associated with a high financial risk . The causes of occupational disability are varied and young professionals have a 40 percent chance of being affected in their lives.

Anyone who has decided to change to another company, should not immediately terminate the BU , but first make a disability insurance comparison or get a personal offer. If a tariff with attractive conditions of insurance, favorable contributions and good achievements is found, the customer should make an application with the desired offerer even before the termination of its current BU. Reason: As health advances increase with advancing age, these may adversely affect the necessary risk assessment. If the customer is denied due to health issues, he does not run the risk of having to do without protection. The termination of the insurance should therefore never occur before the insured does not have the promise of another provider .

Cancel disability insurance = return money?

With the termination of an occupational disability insurance, the policy is often converted by the company into a non-contributory BU . Condition is that already a certain minimum amount of premiums has been paid. However, the monthly BU pension is significantly reduced .

Some tariffs already provide in the conditions of insurance that the customer receives back a part of the contributions after the termination of its BU. However, this service is also reflected in increased contributions.

Long-term consequences of termination of a disability insurance

The policyholder should be aware, prior to the termination of his disability insurance, that under certain circumstances he may never again be protected against the risk of disability . With increasing age, the risk of being rejected by an insurance company based on health issues also increases. In any case, an increased age of accession is accompanied by an increase in contributions with consistent benefits. Depending on the state of health, risk surcharges or exclusions of benefits are to be expected.

Low mortgage rates are not just a dream. To extend the repayment of many loans well into retirement age

“Come to the winner,” the finance broker praises Interhyp on its website and presents a cute little slide rule, which is to pave the way out of the apartment for rent to own home: “You can afford it!” At 1000 Euro rent Interhyp promises 306,123 euros, Bargeld, in 1400 euro rent there are a whopping 428,572 euros as a loan. A fool, whoever still rented so discreetly gave glad tidings of the financial broker.

A fool who takes these loans totals literally. For the assumptions underlying Interhyp puts its digital toys, are refreshingly sale Orientation: The interested party has abundant capital, has only a first mortgage and is especially young. So young that he has removed with an initial repayment of 2 percent until his retirement all debts. But today only provide borrowers who are younger than 35th.

All older grope with the totals from the digital slide rule in a case that presents them as low-interest rates. Namely, the fact is that the repayment of a loan the longer it takes, the lower the interest rate is- original post. And at extremely low-interest rates it lasts – with the same repayment rate mind you – extremely long: What will take another 17 years and 11 months at an interest rate of 10 percent, dragging himself at an interest rate of 1.5 percent already 37 years and 4 months out.

Cheap loans have a cloven hoof

The currently very low-cost loans actually have a drawback: They tempted by excessive debt and too low repayment. And both ends with incredibly long maturities of loans and significant interest rate risks for borrowers at the end of the fixed interest rate. Property developers should, therefore, calculate from the start with higher repayment rates today. Experts recommend to orient at the beginning of the pension. No later than that date should, for example, the Stiftung Warentest, the debt be repaid.

Sometimes they err experts. Helmut Keller, author and debt counselor who has written on the Internet for “Gabler Wirtschaftslexikon” the keyword annuity is transferred from the current mortgage rates of error. The life of a loan writes Keller, “is at an initial repayment of 1 percent, depending on the interest rate and principal accounting 30-40 years.” Not really: The correct procedure would have been to go from 30 to 70 years.

In fact, it takes on a loan interest rate and an initial repayment of one percent, almost 70 years for a mortgage loan is paid off. Seventy! Or it takes exactly 55 years if the agreed interest rate is two percent and is also repaid only one percent. No doubt: Who expects a percent early repayment today, calculates its ruin. Only after more than four percent loan interest rate, the repayment period decreases 40 years under the noted Keller. You can twist and turn as you want, the lower the interest rates, the longer it takes to repay the debt.